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Commitments and Contingencies
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6 Months Ended |
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Dec. 31, 2014
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| Commitments and Contingencies Disclosure [Abstract] | |
| Commitments and Contingencies |
Note 15 - Commitments and Contingencies
Refer to Note 14 - Commitments and Contingencies of the Notes to the Consolidated Financial Statements in our 2014 Form 10-K for information on all commitments.
Contingent production payments. In September 2011, the Company entered into a Purchase and Sale Agreement (the "Nautilus PSA") among the Company and the non-controlling interest owners of NP for the Company's acquisition of the sellers' interests in NP (the "Nautilus Transaction"). The Nautilus PSA provides for potential future contingent production payments, payable by the Company in cash to the sellers, of up to a total of $5.0 million if certain increased average daily production rates for the underlying properties are achieved. J. Thomas Wilson, a director and executive officer of the Company, has an approximately 52% interest in such contingent payments. See Note 7 - Fair Value Measurements above for information regarding the estimated discounted fair value of the future contingent consideration payable related to the Nautilus Transaction.
Sopak Collateral Agreement. On January 14, 2013, the Company entered into a Collateral Purchase Agreement (the "Collateral Agreement") with Sopak AG, a Swiss subsidiary of Glencore International plc ("Sopak"), pursuant to which the Company agreed to purchase: (i) 9,264,637 shares of the Company's Common Stock and (ii) a warrant granting Sopak the right to purchase from the Company an additional 4,347,826 shares of Common Stock. The Collateral Agreement was subsequently amended on January 15, 2013, and completed on January 16, 2013. The Company has estimated that there is the potential for a statutory liability of approximately $1.6 million related to US Federal tax withholdings and related penalties and interest related to the Collateral Agreement. As a result, we have recorded a total liability of $1.6 million as of December 31, 2014, and June 30, 2014, under accrued and other liabilities in the unaudited condensed consolidated balance sheets included in this report. The Company has a legally enforceable right to collect from Sopak any amounts owed to the IRS as a result of the Collateral Agreement. As a result, we have recorded a corresponding receivable of $1.6 million as of December 31, 2014, and June 30, 2014, under prepaid and other assets in the unaudited condensed consolidated balance sheets.
Broadford Bridge-1 Well. During the three months ended December 31, 2014, the Company received a cash call from Celtique for the advancement of estimated expenses in the amount of $2.0 million in connection with a previously issued authorization for expenditure ("AFE") related to the Broadford Bridge-1 well. The Company is evaluating its alternatives under the applicable joint operating agreement, and may fund its share of appropriate expenses from its existing cash balances, but is also considering satisfying its obligations with respect to the AFE through other means, including a potential partial or full farmout transaction related to this well.
Poplar CO2-EOR Pilot Bonus. MI3 Petroleum Engineering ("MI3") is a Golden, Colorado, based petroleum engineering firm that advises the Company with respect to its CO2-EOR activities, including the Company's CO2-EOR pilot at Poplar. Pursuant to the terms of a master services contract with MI3, in addition to contracted rates for services performed, certain contingent bonuses may become payable to MI3. The first of these will become payable upon a decision to pursue a full-field CO2-EOR development at Poplar and is estimated at $255 thousand as of December 31, 2014. The remainder of the bonuses are based on triggers related to project funding and full-field production rates.
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